Copper rallied to its highest in nearly seven years on Thursday on hopes that a vaccine for the coronavirus would galvanise global markets and boost demand for the industrial metal.
Three-month copper on the London Metal Exchange was up 0.9 per cent to $7,368 a tonne at 6:00 pm (IST), after hitting $7,410 a tonne, its highest since January 2, 2014.
The metal, widely used in power and construction industries, has rallied 77 per cent since its March lows.
“Copper’s rise is generally macro driven because of the vaccine and risk sentiment remains upbeat …. We are seeing synchronised gains across all metals,” said ING analyst Wenyu Yao.
“Fundamentals look good but it’s the funds that are having enthusiasm for copper particularly right now.” A softer dollar also buoyed metals, as it makes commodities priced in the currency more attractive to holders of other currencies..
Positioning: Speculators bet on prices rising further, with the net spec long in LME copper at 20.4 per cent of open interest as at Tuesday’s close, highs not seen since 2017, according to broker Marex Spectron.
Copper inventories: On-warrant copper stocks in warehouses monitored by the LME hit their lowest in two months, down 600 tonnes to 102,425 tonnes.
Copper premiums: The Yangshan copper premium climbed to $52 a tonne, compared with an April 2017 low of $46 a tonne touched two weeks ago, pointing to an uptick in China demand.
Scrap metal: A surge in scrap metal usage could slash global demand for primary aluminium and copper, Wood Mackenzie said.
Aluminium: The price difference betÂween three-month aluminium contracÂts on the ShFE and LME hit $138.80 a tonne, the highest since February 2014.
Other prices: LME aluminium rose 0.4 per cent to $1,978 a tonne, zinc gained 0.7 per cent to $2,773, lead added 1 per cent to $2,050, tin climbed 0.2 per cent to $18,775 while nickel was steady at $16,070.
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First Published: Fri, November 27 2020. 02:14 IST
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